Jeonnam Police Detain 10 Including Ringleader on Fraud Charges
Lured Investors With False Promises of Over 400% Returns
Reassured Victims by Showing Fabricated News Articles
A group of individuals who deceived investors into believing they could earn substantial profits by purchasing shares of unlisted companies, and subsequently misappropriated hundreds of billions of won in investments, have been apprehended by the police.
The Anti-Corruption and Major Economic Crimes Investigation Unit 1 of the Jeonnam Provincial Police Agency announced on October 23 that it had arrested 51 people on charges including fraud (under the Act on the Aggravated Punishment of Specific Economic Crimes), and detained 10 of them, including the ringleader, identified as Mr. A.
Mr. A and his accomplices are accused of operating investment advisory chat rooms and, from February 2022 to October 2023, luring investors with false information that buying shares of a specific unlisted company would guarantee returns of over 400%. They allegedly sold shares worth only 100 won per share at a price of 30,000 won per share. Through this scheme, they defrauded victims out of a staggering 21 billion won.
The group meticulously divided roles among themselves, such as 'stock sourcing', 'sales', and 'recruiting bank accounts for illicit use', to deceive victims. Notably, when some victims attempted to verify information or conduct fact-checks, the perpetrators provided them with fabricated news articles falsely stating that the company was 'scheduled to go public', in order to reassure them.
The police identified Mr. A and his associates last year and relentlessly tracked them down. They also succeeded in confiscating approximately 3.7 billion won in criminal proceeds prior to indictment.
A representative of the Jeonnam Provincial Police Agency stated, "Given the seriousness of investment advisory chat room fraud, we have designated it as a special enforcement topic and are conducting intensive crackdowns until the end of this month." The official added, "You should always be suspicious if someone you do not know recommends an investment by phone, text message, or social media. Promises of principal guarantees or high returns are often attempts to exploit victims' difficult financial situations, so please exercise caution."
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